Budgets & Funding

Bush signs transportation act

SAFETEA-LU will invest 30% more than the previous six-year legislation to improve and repair the nation's roads and transportation infrastructure. Photo: National Asphalt Pavement Association

The “Safe, Accountable, Flexible, and Efficient Transportation Equity Act—A Legacy for Users” (SAFETEA-LU) was passed by Congress and signed by President Bush on Aug. 10. SAFETEA-LU will provide $286.5 billion in guaranteed funding for highway, public transportation, and safety programs.

The level of investment contained in the bill was made possible largely by the reforms enacted last year on the federal tax treatment of ethanol motor fuels. The ethanol tax changes ensured the Highway Trust Fund will be compensated for the sale of ethanol motor fuels and will provide $18.9 billion in new trust fund revenues that will be used by the multi-year reauthorization of TEA-21 to improve the nation's highway infrastructure network. In addition, the bill will create a $5 billion dedicated safety program that will provide significant investment in roadway infrastructure safety.

Each states' minimum rate of return on Highway Trust Fund contributions will ramp up from the current 90.5% to 92% by 2008. All states also are guaranteed a total six-year average highway funding increase of at least 19%, when compared to the state's six-year TEA-21 funding total.

The Senate voted against an amendment to strike a provision from the bill that requires states to set aside 2% of the transportation funding they receive annually for stormwater mitigation efforts related to transportation projects—this amounts to $900 million over the life of the bill for stormwater mitigation projects. For more information, visit www.apwa.net.